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Asia avoids Dow slick
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October 14, 1999: 6:44 a.m. ET
Japan edge up on news of possible bank alliance; HK gets technical bounce
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LONDON (CNNfn) - Japanese shares ended mildly higher Thursday as traders appeared to ignore Wall Street's sharp overnight sell-off and instead focus on a possible tie-up between two of the country's leading banks within the next two years.
Hong Kong staged a mild technical rebound a day after plummeting more than 2 percent amid nagging fears about new share placements.
The U.S. dollar rose against the yen Thursday, trading at 107.17 yen in Tokyo, up from 106.60 late Wednesday in New York. The euro was trading at 115.96 yen, above its level of 114.87 yen late Wednesday.
The yen started falling after the Bank of Japan's policy board voted Wednesday to essentially loosen monetary policy by pursuing a policy of buying of government securities to pump up money supply.
Japan's benchmark Nikkei closed up 25.77 points, or 0.15 percent, at 17,780.26 after confirmation that Sumitomo Bank and Sakura Bank - the country's third and fifth-largest banks - were in talks about a possible alliance that would spawn the world's second largest bank. Sumitomo stock surged 10.86 percent in Tokyo, while Sakura shares shot up 11.1 percent.
The news sparked talk of further consolidation across the sector, driving bank stocks higher. Mitsui Trust and Banking Co., a member of the same financial group as Sakura, soared 30.77 percent, while Daiwa Bank catapulted 17.47 percent.
Hong Kong's Hang Seng added 51.18 points, or 0.41 percent, to 12,527.05 Thursday afternoon, reversing a three-day losing streak. The index has shed value in recent sessions as investors have dumped stock ahead of a big government public offering and multi-billion-dollar placements by major companies.
In Singapore, selective buying of blue chips prodded the Straits Times Index 0.27 percent higher to 2,101.24, with national carrier Singapore Airlines contributing the brunt of the gains.
The biggest markets managed to shrug off a second day of steep losses on Wall Street. The Dow Jones industrial average got a shellacking, plunging 184.90 points, or 1.8 percent, to 10,232.16 as a mix of corporate earnings fears and inflation jitters offered bad alchemy. The tech-laden Nasdaq fell 2.5 percent, while the S&P 500 shed 2.1 percent.
Despite those losses, South Korean stocks listed on the Kospi ended up 1.23 percent at 866.02, thanks to a late rally in brokerage shares. Hopes that the government may resolve the problems of the debt-saddled Daewoo Group in the near future gave a boost to securities stocks.
Australia's All Ordinaries ended 0.19 percent lower, at 2,901.3, after an eleventh-hour rally by resources heavyweight BHP helped pull the index off earlier lows. BHP closed up 1.8 percent.
Kuala Lumpur was up a quarter of a percent as investors hugged the sidelines following the Dow's fall. But Thailand, Jakarta and Philippines shares all lost ground, falling 0.88 percent, 0.24 percent and 0.2 percent, respectively.
In Taiwan, the weighted index closed up 0.55 percent at 7,879.91 as investors looked beyond fresh U.S. antidumping penalties on locally-manufactured computer memory chips and the Wall Street softness. The electronics sector rose 1.12 percent, outperforming the overall market.
In Tokyo, high-tech manufacturers came under selling pressure on the heels of the Nasdaq's overnight slide, with NEC Corp. slipped 0.22 percent to 2,295 yen.
Itochu Corp. tumbled 11.82 percent after the trading house warned it would take a giant loss this year from a planned restructuring.
In Hong Kong, two banks drew support from statements that they intended to pay special interim dividends. Hang Seng Bank was up 1.17 percent at HK$86.50, while CITIC Pacific shot up 4.68 percent to HK$21.25.
--from staff and wire reports
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